{"ok":true,"canonical_url":"https://dealroom.so/glossary/new-business-entity","api_url":"https://dealroom.so/api/public/glossary/new-business-entity","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"new-business-entity","term":"New Business Entity","group":"Doing the deal","definition":"The legal structure you create (e.g., LLC, Corporation) to purchase and operate the business. This entity will be the borrower on your SBA loan.","what_it_means":"For an asset purchase, you'll almost always form a new business entity to acquire the assets of the existing business. This protects your personal assets and simplifies the transaction. This entity will be the legal borrower and will sign all loan documents, including the note and security agreements, and operate the business post-acquisition.","url":"https://dealroom.so/glossary/new-business-entity","official_sources":[],"related":[{"slug":"llc","term":"LLC","url":"https://dealroom.so/glossary/llc"},{"slug":"corporation","term":"Corporation","url":"https://dealroom.so/glossary/corporation"},{"slug":"partnership","term":"Partnership","url":"https://dealroom.so/glossary/partnership"},{"slug":"asset-purchase","term":"Asset purchase","url":"https://dealroom.so/glossary/asset-purchase"}],"related_questions":[{"question":"Are there specific requirements for the business entity structure for an SBA 7(a) loan?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-requirements-for-the-business-entity-structure-for-an-sba-7-a-loan"},{"question":"Can a non-profit entity apply for an SBA 7(a) loan for business expansion purposes?","url":"https://dealroom.so/for-lenders/questions/can-a-non-profit-entity-apply-for-an-sba-7-a-loan-for-business-expansion-purposes"},{"question":"What if the acquired business changes its legal entity structure after the SBA loan is approved?","url":"https://dealroom.so/sba-7a/questions/what-if-the-acquired-business-changes-its-legal-entity-structure-after-the-sba-loan-is-app"},{"question":"Does my business have to be a specific legal entity type for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/does-my-business-have-to-be-a-specific-legal-entity-type-for-an-sba-7-a-loan"},{"question":"What if the business I'm acquiring leases its property from an entity owned by the seller?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-acquiring-leases-its-property-from-an-entity-owned-by-the-seller"},{"question":"What happens if the acquired business changes its legal entity structure after the SBA loan is approved?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-the-acquired-business-changes-its-legal-entity-structure-after-the-sba-loa"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — New Business Entity","url":"https://dealroom.so/glossary/new-business-entity","source_type":"DealRoom Data"}}